Storm clouds gather for society banker

Just over a year ago, a brash young fashion publicist, Roxy Jacenko, seemed oblivious to the storm clouds gathering over her banker husband Oliver Curtis's head.

In a breezy interview with the celebrity columnist Kate Waterhouse, Jacenko said she had never once discussed with her husband the allegations of insider trading levelled against him by his former flatmate and best friend, John Hartman, a couple of years earlier.

Party set … Oliver Curtis (second from left) with Rachel Gilbert and Fernando Barraza at the Cleo Bachelor of the Year Awards. Photo: Lee Besford

''It was before my time. I don't ask,'' she declared. ''I think if there was anything more to do with it, it would have been pursued by the court, and it has and nothing came of it … It is good that it is finished.''

This week the sheen came off the gilded world inhabited by Jacenko, 32, and her 27-year old ''society banker'' spouse when Curtis appeared in court charged with pocketing at least $1 million from insider trading.

He has not been required to enter a plea at this stage. According to the Australian Securities and Investment Commission, Curtis made the trades using illicit information obtained from Hartman between May 2007 and August 2008, at a time when Hartman was a junior broker with Orion Asset Management. If found guilty, Curtis faces penalties of up to $220,000 in fines and/or five years jail. The same crime committed today would lead to a jail sentence of up to 10 years.

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Hartman has already done his time inside - he walked free last year having served 15 months of a sentence which was originally set at four years. But the charging of Curtis means Hartman could land in court again, this time as star witness against his former childhood and school friend.

Hartman, as the appeal court noted in 2011, has ''given an undertaking to assist and give evidence in any proceedings against Mr Curtis''.

If Hartman does testify it will re-open painful wounds for his impeccably-connected lower north shore family, a tribe presided over by eminent Mosman obstetrician Keith Hartman. Father of six and grandfather of six more, Dr Hartman brought Packer and Murdoch babies into the world, and last year was made a member of the Order of Australia for services to obstetrics and gynaecology.

Ironically, Hartman snr and Curtis's father, the businessman Nick Curtis, were connected through the Mater Hospital at the very time in 2009 when Hartman jnr began spilling the beans to ASIC.

Nick Curtis, a founding partner of Riverstone Advisory and the executive chairman of rare earths miner Lynas Corp, was chairing the hospital board and Dr Hartman has his ''boutique'' obstetrics clinic next door at the Mater clinic.

Nick Curtis has since stepped down from the role. Cool relations have been reported between the families.

Jacenko and Curtis have glittered regularly in gossip columns.

As Justice Peter McClellan observed passing sentence on John Hartman in late 2010, ''anyone who is the parent of children could not but appreciate the tragedy the offender's behaviour represents to the family''.

Curtis's court appearance this week will also send shock waves through the eastern suburbs party set. Jacenko and Curtis have glittered regularly in gossip columns and on society pages, particularly Jacenko, who famously set up her Sweaty Betty PR public relations business at the age of 24 and cultivates a relentless public profile.

When the pair announced their engagement, she became the proud wearer of an eye-catching diamond ring worth a rumoured $200,000.

When they married in March 2012 the nuptials were billed as the wedding of the year, the details slavered over by women's magazines and websites. Her wedding dress was said to have been flown in from the US on a first-class seat.

His velvet slippers, according to marriage website the Knot, were personalised with his initials, while the sitting area at Quay restaurant was filled with pillows monogrammed with the initials of the couple.

Guests sipped Bollinger from crystal flutes and partook of a five-tier wedding cake almost as tall as the bride herself.

As the Knot reported breathlessly: ''The couple hired a consultant to help plan the wedding as both bride and groom have such hectic work schedules.''

The arrival of daughter Pixie-Rose garnered almost as much publicity. Jacenko told Grazia she had worked until 8pm on the night before the birth, and was back at work firing off emails from her BlackBerry three hours after undergoing a caesarean.

Pixie wasn't getting short shrift, though. A special annexe had been completed for the infant at Sweaty Betty headquarters, ''fully equipped with cute girlie wallpaper, a flat-screen TV and bathroom en suite with a change table''.

The indefatigable Jacenko appears to be keeping the show on the road despite her husband's travails. This week it was revealed she would be a contestant on Channel Nine's Celebrity Apprentice. Neither her office nor members of the Hartman family returned calls from Fairfax Media.

It had all looked so promising for John Hartman when he started work at Orion on 27 March 2006, aged just 20. Born the second-youngest of the six Hartman siblings, John had been a successful student at Catholic boys school St Ignatius, Riverview, and had studied economics at Sydney University.

From there he was hired by Orion and outwardly, the trappings of success fell into his lap at a rapid rate.

He had a Ducati motorcycle, a BMW and a $3000 a week Bondi apartment he shared with Curtis.

But at university demons had also started to emerge. He had developed a gambling habit, losing money at Star City casino and on the horses. He entered a world, Justice McClellan would say later, which ''corrupted his values''.

In August, 2006, six months after starting at Orion, Hartman opened a personal trading account with IG Markets in Britain.

Initially he lost money and the account was suspended. Later, he started trading again, this time more successfully, using his inside knowledge of when Orion was about to make large share transactions.

Hartman's job was to carry out buy-and-sell orders for senior managers who oversaw hundreds of millions of dollars' worth of client investments.

By making his own trades just ahead of Orion's, he could anticipate share price movements and profit accordingly.

But trading in his own name would prove his undoing.

ASIC alleges that Hartman and Curtis came to a ''mutual understanding'' in 2007-08 that Curtis would trade using confidential data given to him by Hartman.

Curtis would provide the capital and Hartman the inside information, it is claimed.

The pair allegedly communicated with encrypted BlackBerries allegedly supplied by Curtis so they could minimise the chance of detection. Hartman's weapon of choice was a form of financial instrument known as a contract for difference or CFD, which allows an investor to bet against share price movements for a fraction of what it would cost to actually buy the stock, while yielding the full upside of a company's share price movement.

By mid-2008 Hartman's financial circumstances had changed. It is claimed he called off the alleged deal with Curtis and started trading on the information himself, supposedly telling Curtis ''I just can't keep giving you this information''.

Within months ASIC had become aware of Hartman's activities, its investigation uncovering trades that were later used in the charges against him.

The final unravelling for Hartman came in January 2009 when IG Markets demanded proof that Orion had approved the young broker's personal trades.

Given the sensitivity of his position, there were strict curbs on his ability to trade shares.

About to be exposed for his private dealings, he confessed to his father, who called in the legal heavyweight Mark O'Brien. Abandoning his Bondi apartment, he moved home. On January 20, 2009, he bared all to Orion and was sacked. He had his first interview with ASIC the next day.

In evidence before the courts, an ASIC solicitor, Robert MacAlpine, observed how hard it was to obtain evidence in insider trading offences. ASIC would have been unlikely to have been successful in this case without Hartman's admissions, he said.

In a statement to the appeals courts in November 2011, MacAlpine made it clear that without Hartman's information ASIC would not have identified the ''tipping offences'', ''nor would they have been likely to have obtained material that assisted them in the investigation as to whether Mr Curtis had himself engaged in insider trading''.

The appeal court was told that Hartman would be a ''crucial witness in any future criminal or civil proceedings against … Curtis''.

In passing a four-year sentence on Hartman (later reduced on appeal), Justice McClellan referred to evidence from psychiatrists that the young trader had been suffering from a ''major depressive order'', possibly triggered by witnessing his older brother Alex's mental breakdown in John's last year of school. (Alex Hartman had been a schoolboy IT genius, later diagnosed with bipolar disorder. Today he has media business interests with, among others, Katherine Keating, daughter of Paul.)

John Hartman, Justice McClellan said, had got much the same adrenaline ''rush'' from his illicit trades as he got from gambling. So compulsive was his dealing in CFDs, he kept binoculars by his bed so he could check share prices through the night on his computer without leaving the sheets.

Chastising Hartman's employers, McClellan observed that ''a person of immature years was allowed access to market information without effective supervision in a world where … the temptations are so great and the potential rewards so significant that the fall into criminality of individuals is a significant risk''.

John Hartman undertook building and real estate courses in jail. The family is tight-knit, and brother Luke is a successful property developer. Young John is unlikely to ever work in financial services again.

Hartman's sad saga is a parable for the times, a reminder of how crazy the financial universe got in the lead-up to the global financial crisis.

It remains to be seen how much of a window the Curtis case will open into that same, heady world.